As it was expected, the bullion has retreated to the 61.80% Fibonacci retracement level at 1,278.73. However, the metal seems to have already found support in the retracement level and other additional support levels. Due to that reason it is speculated that the commodity price will resume its course higher in the near future.
US homebuilding activity dropped more than expected last month amid the unusually warm weather and weaker manufacturing activity, official figures revealed on Tuesday. The US Department of Commerce reported that housing starts fell 6.8% to a seasonally adjusted rate of 1.22M, as construction of single-family homes in the Midwest posted the largest decline since 2014. Meanwhile, market analysts anticipated a slighter drop to a 1.25M unit rate in March, following the preceding month's upwardly revised 1.30M unit rate. On an annual basis, housing starts were up 9.2%. Data also showed that building permits climbed to a 1.26M unit rate in March, compared to the previous month's upwardly revised 1.22M unit rate, whereas analysts expected a rise to 1.25M unit rate.
Upcoming events: US data and Mnuchin's speech
Gold trades above retracement level
As forecasted before the yellow metal has retreated to the support of the 61.80% Fibonacci retracement level, above which it remained on Thursday morning. The retracement level is located at the 1,278.73 level. It is supported by the monthly R1 at 1,275.52 and the weekly PP at 1,274.84. It is most likely that after finding support during the late hours of Wednesday trading the bullion's price will resume the surge, which was stopped short before reaching the 1,300 mark. The reason for that is the fact that there are no resistance levels up to the 1,300 level.
Daily chart
Hourly chart
Markets remain neutral
SWFX traders are bearish on the metal, as 56% of open positions are short. However, 64% of trader set up orders are to buy the metal.
OANDA Gold traders are neutral regarding the metal, as open positions are 51.69% long on Thursday, compared to 50.84% previously. Meanwhile, traders of SAXO bank remain neutral, as 51.29% of open positions are long, compared to 51.85% short positions on Wednesday.
Spreads (avg, pip) / Trading volume / Volatility
Market participants foresee the price of Gold being above 1,300 in July
Traders who were asked regarding their longer-term views on gold between March 20 and April 20 expect, on average, to see the metal near 1,300 in July. Generally, 53% (+1%) of participants believe the price will be above 1,300 in ninety days. Alongside, 35% (-1%) of those surveyed reckon the currencies will trade in the range between 1,100 and 1,300 over the next three months.